may legal update 2020

May 2020 Legal Update

 

FUTURE COMPLIANCE DATES

JULY 31, 2020 (if on a calendar plan year): Form 5500 Due

Group plans with 100 or more participants must file Form 5500 annually by the last day of the 7th month following the end of the plan year. Outside of a few exceptions, all group health plans subject to ERISA are required to file a form 5500 when they have 100+ participants. Most 401(k) plans, regardless of size, are required to file form 5500. For a list of exceptions and additional information, click here to visit the IRS 5500 Center. If an extension is obtained, forms are due by October 15, 2020.

JULY 31, 2020: PCORI Fee Due

July 31, 2020 is the final deadline for payment of the Patient-Centered Outcomes Research Institute (“PCORI”) fee. The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year multiplied by the applicable dollar amount for the year. The fee is $2.45 per covered person for plan years ending between January 1, 2019, and September 30, 2019. Note that plans with effective dates starting on or after October 2, 2019, will not be subject to paying the PCORI fees. Click here to access the form: IRS FORM 720.

Prior to state primary election days: Voting Leave May Be Required

While there are no federal laws requiring time off to vote, many states require employers to provide voting leave. State primary election days vary, and some state primary election dates (see calendar) have been postponed from the original date scheduled. Confirm your state’s primary election date to prepare for voting leave and notifications, if needed. Refer to our March Legal Update for state-specific requirements.

FEDERAL COMPLIANCE DATES

BENEFIT PLAN DEADLINE EXTENSIONS AND 125 PLAN CHANGES ANNOUNCED

The federal government continues to provide flexibility and relief for participants in employee benefit plans with extended time frames for COBRA, Special Enrollment Periods, and filing and/or appeal of benefit claims. See in-depth article for details and examples on how these extensions work: Benefit Plan Timeframe Extensions.

The IRS recently released Notice 2020-29: COVID-19 Guidance under Section 125 Cafeteria Plans allowing employers to choose to modify their plan(s) to allow employees to do the following:

  • Enroll in health care coverage mid-year for those who previously declined coverage.
  • Change from one plan type to another, or change from individual to family, and similar.
  • Revoke their health care coverage (must provide written verification of other coverage).
  • Change FSA contributions up or down, within plan limits.
  • Change Dependent Care Account contribution up or down, within plan limits.

Participation in changes to plans is at the option of the employer, it is not required. Some of the reasoning for this change is to allow furloughed workers to drop coverage while on furlough, then re-enroll after coming back to work. It also allows employees who opted against taking insurance to now obtain coverage, particularly in light of the perceived COVID-19 risk. It also may encourage people who have concerns about exposure at work to come back with coverage.

For additional details and links to the IRS notice, see in-depth article here: Changes to Section 125 cafeteria Plans.

The IRS also recently released Notice 2020-33: COVID-19 Guidance under Section 125 Cafeteria Plans regarding changes to Section 125 Cafeteria Plans and the required notice.

  • 2019 FSA carry-over amounts are increased from $500 to $550.
  • Participants have until Dec 31, 2020, to use their 2019 contributions.
  • There has been no extension for 2020 plans, but employees may stop contributions at any time.
  • A Summary of Material Modifications (SMM) is required by end of plan year.
  • For those participating in an Individual Coverage Health Reimbursement Account (ICHRA), those plans are now permitted to reimburse for premiums incurred before the start of the 2020 plan year IF the premium for the month was received before the date of treatment.

If employers want to implement these changes, they need to amend their Premium Only Plan Document (POP) or Flexible Spending Account (FSA) document and notify employees with either a Summary of Material Modification or POP Summary Plan Description.  The HR Service POP documents have been updated to incorporate these changes.

  • Summary of Material Modification Cafeteria Plans
  • Board Resolution – Adopting Cafeteria Plan Changes
  • Employee Notification – New Periods to Make Elections for Benefits or Coverage

To download the templates, click here: HR Service POP Templates. 

FLSA OVERTIME EXEMPTION EXPANDED FOR SOME COMMISSIONED WORKERS

The U.S. Department of Labor (“DOL”) recently expanded eligibility for an overtime exemption for certain retail or service establishments previously deemed ineligible or potentially ineligible for an exemption under the Fair Labor Standards Act (“FLSA”).

A partial list of establishments “lacking retail concept” and a partial list of establishments who sales or service “may be recognized as retail” was originally issued in 1961. (See excerpts of lists here: Lacking Retail Concept list and Possible Retail list). In its recent final rule, the DOL withdrew these lists in favor of a “generally applicable analysis” that “is better suited to account for developments in industries over time regarding whether they are retail or not.”

A retail or services sector employer seeking to use the retail exemption for commissioned employees under Section 7(1) of the FLSA must meet three conditions, according to the related DOL fact sheet:

  • The employee must be employed by a retail or service establishment.
  • The employee’s regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked.
  • More than half the employee’s total earnings in a representative period must consist of commissions.

Unless all three conditions are met, the exemption is not applicable, and the employer must pay overtime for all hours worked beyond 40 in a workweek at 1 ½ times the employee’s regular rate of pay.

FINAL RULE REVISES CALCULATIONS FOR SALARIED, NON-EXEMPT

In related news, the U.S. Department of Labor’s Wage and Hour Division recently announced a final rule that revises the regulation for computing overtime compensation under the FLSA for salaried, non-exempt employees whose work hours vary each week.

The rule clarifies that bonuses, premium payments, commissions, and hazard pay on top of fixed salaries are compatible with the fluctuating workweek method of compensation and that employers must include supplemental payments when calculating the regular rate of pay as appropriate under the FLSA.

PPP LOAN FORGIVENESS APPLICATION RELEASED

The Small Business Administration (“SBA”) released on May 15, 2020, the application form that borrowers will use to apply for Paycheck Protection Program (“PPP”) loan forgiveness, available here: Loan Forgiveness Application. The SBA has also released additional guidance that addresses requirements for loan forgiveness (SBA Loan Forgiveness Requirements) and PPP loan review procedures and related borrower and lender responsibilities (SBA Loan Review Procedures).

 

The application form provides information about the calculations they will be required to provide to apply for PPP loan forgiveness. The application details a safe harbor provision for borrowers that return employees to work by June 30, 2020, from the full-time equivalency reduction calculation.

In addition, the application explains that certain “incurred” but unpaid expenses could be eligible for forgiveness even if they are not paid during the eight-(8)-week period after a PPP loan is funded. For example, if utility costs are incurred but not paid during the eight weeks after the Borrower receives the PPP loan proceeds, such costs are forgivable if paid on or before the “next regular billing date.” Utility costs are defined as “payments for the distribution of electricity, gas, water, transportation, telephone, or interest access for which service began before February 15, 2020.”     

 A PPP loan forgiveness application must contain documentation concerning the use of loan proceeds, including:

  • Lease and mortgage documents signed before February 15, 2020, associated with rent and interest expenses, including amortization schedules and canceled checks to verify payment.  
  • Bank statements (or third-party payroll reports) documenting cash compensation paid to employees.
  • State and federal payroll reporting forms (e.g., 941).
  • Payment receipts, cancelled checks or account statements documenting employer contributions to employee health and retirement plans.
  • Invoices, receipts and canceled checks for all business utility statements.
  • Individual employee payroll records and FTE calculations.

In addition, borrowers must maintain documentation supporting their certifications regarding the necessity of the loan request and eligibility for a PPP loan.  

NO EEO-1 REPORTING WILL BE REQUIRED IN 2020

In a recent press release, the EEOC has announced there will be no EEO-1 reporting obligation in 2020 due to the COVID-19 public health emergency.

The announcement further stated that the EEOC expects to begin collecting the 2019 and 2020 EEO-1 Component 1 in March 2021 and will notify filers of the precise date the surveys will open as soon as it is available.

Additional updates will be provided as information is available.

UPDATES REGARDING FFCRA AND CARES ACT

In previous Legal Updates, we provided an overview of the provisions of the Families First Coronavirus Response Act (“FFCRA”) and the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Since then, various federal agencies have released documents that provide additional information and clarifications. Check these documents frequently, as they continue to be updated regularly.

OSHA ISSUES GUIDANCE REGARDING COVID-19 CASES

Effective May 26, 2020, new guidance published by the Occupational Safety and Health Administration (“OSHA”) requires employers who are obligated to submit OSHA logs to determine whether employees who have contracted COVID-19 did so while at work.

This guidance reverses previous guidance that limited the requirement to make work-related determinations to employers in only healthcare industries, emergency response organizations, and correctional institutions.

The new guidance now requires employers to record all COVID-19 cases that are confirmed by at least one positive test; are work-related; and cause employees to seek medical treatment beyond first aid, result in lost workdays or restricted duty or cause loss of consciousness or death.

To help employers determine whether an employee’s COVID-19 case was likely contracted at work, OSHA provides factors for employers to consider:

  • Whether there are several cases among workers who work(ed) closely together and there is no alternative explanation;
  • Whether an employee contracted COVID-19 shortly after lengthy close exposure to a customer or a coworker who confirmed positive and there is no alternative explanation;
  • Whether the employee’s job duties have them in frequent, close exposure to the general public in an area with ongoing community transmission and there is no alternative explanation;
  • Whether the employee is the only worker to contract COVID-19 and the employee’s job duties do not include frequent contact with the public, regardless of community transmission; and
  • Whether the employee, outside of work, has close and frequent contact with someone who has COVID-19.

If determined to be work-related, COVID-19 should be coded as a respiratory illness on the OSHA 300 Log. If an employee voluntarily requests that their name not be entered on the OSHA 300 Log, the employer must not publish the employee’s name.

2021 HSA LIMITS RELEASED

The Internal Revenue Service recently issued the 2021 adjustments for HSAs.

Annual HSA Contribution Amounts

2020

2021

Coverage Level

$3,550

$3,600

Individual

$7,100

$7,200

Family

$1,000

$1,000

Catch-Up

Annual Maximum Out-of-Pocket Limits for HDHP

2020

2021

Coverage Level

$6,900

$7,000

Individual

$13,800

$14,000

Family

 Annual Minimum Deductible Amount Limits for HDHP

2020

2021

Coverage Level

$1,400

$1,400

Individual

$2.800

$2,800

Family

REMOTE FORM I-9 DOCUMENT REVIEW APPROVAL EXTENDED

On May 14, 2020, U.S. Immigration and Customs Enforcement (“ICE”) extended the approval to remotely review an employee’s identity and employment authorization documents for Form I-9 – but only when that employee will be working remotely. These provisions were originally set to expire May 19, 2020, but they have been extended for another 30 days.

Employers may first inspect Section 2 documents via video, fax, email, or other appropriate means. Once normal operations resume, employers must inspect documents in person and note “COVID-19” as the reason for the delay in the section’s “additional information” field, as well as “documents physically examined” with the date of inspection to that field or Section 3 as appropriate. Alternatively, the form also allows an employer to appoint a representative to review new hires’ documents. Examples of such a representative include a law firm, a vendor, a notary, or a local employee.

Employers who make use of the exception must provide written documentation of their remote onboarding and telework policy for each employee.

DOCUMENT RETENTION REQUIREMENTS OF BODY TEMPERATURE RECORDS

Since the COVID-19 pandemic has been deemed to meet the direct threat standard, the Equal Employment Opportunity Commission (“EEOC”) allows employers to take employees’ body temperatures in an effort to mitigate the spread of COVID-19 in the workplace. The information collected must be treated as confidential medical information. If the body temperatures are recorded, OSHA requires that the information collected during such “biological monitoring” must be retained for a period of 30 years. Alternatively, employers may choose to take employees’ temperatures and merely view the results without tracking or recording the data.

STATE COMPLIANCE UPDATES

CALIFORNIA

Workers’ Compensation Eligibility for Certain COVID-19 Claims

Executive Order #N-62-20, signed on May 6, 2020, established that an employee’s COVID-19-related illness may be eligible for workers’ compensation benefits if the following conditions apply:

  1. On or after March 19, 2020, the employee tested positive for or was diagnosed with COVID19 within 14 days after a day that the employee performed labor or services at the employee’s place of employment at the employer’s direction;
  2. The employee’s place of employment where the labor or services were performed was not the employee’s home or residence; and
  3. The diagnosis was done by a physician who holds a physician and surgeon license issued by the California Medical Board, and that diagnosis is confirmed by further testing within 30 days of the date of the diagnosis.

Critical Food-Service Workers Granted Extra Two Weeks of Paid Sick Leave

Effective upon its signing on April 16, 2020, Executive Order N-51-20 requires California employers in the food service industry with 500 or more employees nationwide to grant its food service workers additional paid sick leave. Full-time workers are eligible for up to two weeks of sick pay, and part-time employees are eligible to receive an amount of leave equal to the hours they typically work in a two-week period.

Covered employees are eligible to use the additional paid sick leave if:

  • subject to a federal, state or local order to quarantine or self-isolate due to COVID-19.
  • instructed by a medical professional to self-quarantine or self-isolate.
  • barred from the job by the employer due to health concerns related to the potential transmission of COVID-19.

The maximum payout each employee can receive is $511 per day and $5,110 in total. It does not apply to employers who already offer equivalent COVID-19 supplemental paid sick leave. Employers cannot require workers to use other paid or unpaid leave or vacation time before accessing this additional leave.

The order will expire when the statewide stay-at-home mandate is lifted.

For additional information, see the California Labor Commissioner’s Office FAQ Document.

Applicable employers are required to display a poster summarizing the new order or provide the information electronically. It can be downloaded at no charge here: Posting notice.

Los Angeles Enacts Worker Retention and Right of Recall Ordinances

Effective June 14, 2020, two ordinances enacted by the City of Los Angeles require fair employment practices in response to job and economic insecurity due to COVID-19 related shelter-in-place orders. The Ordinances apply to four categories of businesses and employers: airports, commercial property, event centers, and hotels.

Under the Worker Retention Ordinance, when a covered business experiences a change in control, covered employees are given preference in hiring by the successor business employer for a period of 6 months and must be retained for at least 90 days, unless there is cause for termination.

The Right of Recall Ordinance requires a covered employer to offer positions that become available on or after the June 14, 2020 effective date to qualified employees who were laid off on or after March 4, 2020. A laid-off employee is deemed qualified and must be offered a position if the employee (1) held the same or similar position at the same location when the employee was laid off or (2) is or can be qualified for the position with the same training that would be provided to a new worker hired into the position. If more than one laid-off employee is entitled to preference for a position, the employer must offer the position to the laid-off employee with the greatest length of service in the position and then to the laid-off employee with the greatest length of service with the employer at the employment site.

For additional details, see the full texts of the ordinances: Worker Retention Ordinance and Right of Recall Ordinance.

Alameda Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees in Alameda will increase to $15.00 per hour.

Berkeley Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees in Berkeley will increase to $16.07 per hour.

Emeryville Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees in Emeryville will increase to $16.84 per hour. Previously, the minimum wage varied depending on the size of the employer.

Fremont Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers with more than 25 employees in Fremont will increase to $15.00 per hour. For employers in Freemont with 25 or fewer employees, the minimum wage remains at $13.50 per hour.

Los Angeles Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers with more than 25 employees in Los Angeles City as well as in unincorporated Los Angeles County will increase to $15.00 per hour. For employers with 25 or fewer employees in Los Angeles and certain non-profit organizations, the minimum wage will increase to $14.25 per hour. The minimum wage rate applies to employees who perform at least two hours of work in Los Angeles in a calendar week and who are not exempt from the state minimum wage requirements.

Malibu Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers with more than 25 employees in Malibu will increase to $15.00 per hour. For employers in Malibu with 25 or fewer employees, the minimum wage will increase to $14.25 per hour.

Milpitas Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees who perform at least two hours of work in Milpitas in a calendar week and who are not exempt from the state minimum wage requirements will be adjusted based on the change in the Bay Area Consumer Price Index for Urban Wage Earners and Clerical Workers in the San Francisco-Oakland-San Jose metropolitan area between February 2019 and February 2020, rounded to the nearest five cents and not exceeding five percent. The actual rate has not yet been published.

Novato Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for very large employers in Novato with more than 100 employees will increase to $15.00 per hour. For large employers in Novato with between 26 and 99 employees, the minimum wage will increase to $14.00 per hour. For small employers in Novato with 25 or fewer employees, the minimum wage will increase to $13.00 per hour.

Pasadena Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers in Pasadena with more than 25 employees and certain non-profit organizations will increase to $15.00 per hour. For employers in Pasadena with 25 or fewer employees, the minimum wage will increase to $14.25 per hour.

San Francisco Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees in San Francisco will increase to $16.07 per hour.

San Leandro Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employees in San Leandro will increase to $15.00 per hour.

Santa Monica Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers with more than 25 employees in Santa Monica will increase to $15.00 per hour. For employers with 25 or fewer employees, the minimum wage will increase to $14.25 per hour.

Santa Rosa Minimum Wage to Increase July 1

Effective July 1, 2020, the minimum wage for employers with more than 25 employees in Santa Rosa will increase to $15.00 per hour. For employers with 25 or fewer employees, the minimum wage will increase to $14.00 per hour.

Oakland Mandates “Measure Z”

Effective July 1, 2020, hotel employers with at least 50 or more guest rooms are required under an ordinance titled “Measure Z” to provide their employees with panic buttons to allow them to summon help if they are harassed or threatened. Measure Z also provides the right to hotel workers to report violent/threatening behavior and establishes restrictions on the maximum space to be cleaned.

A Frequently Asked Questions document about Measure Z can be found here: Measure Z.

City of Sacramento Mandates Panic Buttons for Hotel Workers

Effective July 14, 2020, hotel employers are required to provide their employees with panic buttons to allow them to summon help if they are harassed or threatened.

COLORADO

Unclaimed Wages Reporting Requirements Amendments Impact Employers

Effective July 1, 2020, Colorado’s unclaimed wages reporting requirements have been amended to include the following provisions that could impact employers:

  • Amounts loaded onto pay cards are considered wages for purposes of unclaimed wages.
  • The date that triggers the requirement to file a report is changed to July 1 from June 30.
  • The amount of unclaimed wages that triggers the employee-notification requirement is changed to $25 or more, from $50 or more.
  • The time within which an employer must notify an employee that the employer is holding unclaimed wages before filing a report with the Colorado Treasury Department is changed to 180 days, from 120 days.
  • Small employers and tax-exempt organizations are no longer exempt from reporting requirements.
  • Certain penalty amounts are increased, and other penalties are repealed.

DISTRICT OF COLUMBIA

Universal Paid Leave Amendment Act

The D.C. Universal Paid Leave Amendment Act of 2016 (“UPLAA”) imposed a new tax on D.C. employers effective July 1, 2019. Starting July 1, 2020, eligible individuals may file a claim for paid leave benefits upon the occurrence of a qualifying leave event, with those benefits to be paid out of the Universal Paid Leave fund.

To be eligible under the UPLAA, an individual must have been a covered employee during some or all of the 52 calendar weeks immediately preceding the qualifying event. The law provides paid-leave rights to part-time employees, as long as they worked for the employer at some point in the prior year. A clause in the law suggests that employees who work for an employee with fewer than 20 employees are not entitled to “job protection” (i.e., restoration of their job) when they return from paid leave.

Cumulatively, no more than eight weeks of paid leave total in a 52-week period will be available under the UPLAA.

The UPLAA requires covered employers to grant unpaid leave for the care of family members with serious health conditions, including:

  • a person to whom the employee is related by blood, legal custody or marriage.
  • a child who lives with an employee who exercises parental responsibility.
  • an individual with whom the employee lives and is in a “committed relationship.”
  • a legal ward.
  • a son or daughter of a domestic partner.
  • a person “who stood in loco parentis” to the employee when he or she was a child.

The UPLAA also includes provisions to protect employees from retaliation for exercising or seeking to exercise their new rights to paid leave.

ILLINOIS

Chicago Fair Workweek Ordinance Takes Effect

Effective July 1, 2020, Chicago’s Fair Workweek Ordinance enforces fair and equitable employment scheduling practices, provides covered workers with protections with respect to employer scheduling practices, and requires employers needing additional hours — whether temporary or permanent — to first offer those hours to current covered part-time employees.

The ordinance applies to employers with at least 100 employees in the building services, healthcare, hotel, manufacturing, retail, or warehouse services industries, and to restaurant employers with at least 250 employees and 30 locations.

The ordinance applies to employees working for a covered employer who earns less than $26 per hour or $50,000 per year.

The Fair Workweek Ordinance requires at least ten days’ advance notice of work schedule, the right to decline previously unscheduled hours, one hour of predictability pay for any shift change within 10 days, and the right to rest by declining work hours less than 10 hours after the end of previous day’s shift.

Effective January 1, 2021, the ordinance will also apply to safety-net hospitals, defined as a hospital which is licensed by the Department of Public Health as a general acute care or pediatric hospital and is a disproportionate-share hospital under Section 1923 of the federal Social Security Act, as determined by the Department of Business Affairs and Consumer Protection. To meet the criteria for the delayed effective date, a safety-net hospital must also have a Medicaid Inpatient Utilization Rate (MIUR) of at least 40% and a charity percent of at least four percent OR have a MIUR of at least 50 percent.

For more details, see information posted on the Chicago Business Affairs and Consumer Protection website here: Fair Workweek Ordinance.

Cook County Minimum Wage

Effective July 1, 2020, the minimum wage in Cook County increases to $13.00 per hour.

Chicago Minimum Wage Increase

Effective July 1, 2020, the minimum wage for employees in Chicago will increase to $14.00 per hour.

Minimum Wage Increases across the Rest of the State

Effective July 1, 2020, the minimum wage for employees in Illinois but outside of Cook County will increase to $10.00 per hour. The maximum tip credit will increase from $3.70 per hour to $4.00 per hour.

Hotel and Casino Employee Safety Act Enacted

Effective July 1, 2020, Illinois’ Hotel and Casino Employer Safety Act requires hotel and casino employers to provide employees who work in isolated spaces with panic buttons to use if they are sexually harassed or assaulted. It also requires hotels and casinos to develop and follow a written policy to protect employees against sexual harassment and sexual assault by guests, as well as prohibits employer retaliation for an employee disclosing, reporting or testifying about sexual harassment and sexual assault.

INDIANA

Employers Required to Develop COVID-19 Plan

Effective May 11, 2020, Executive Order 20-26 requires all businesses and entities in Indiana to have a COVID-19 plan implementing measures and institute safeguards to ensure a safe environment for their employee and any customers, clients, members, etc.

The plan must address, at a minimum, the following four items:

  1. Instituting an employee health screening process;
  2. Employing enhanced cleaning and disinfecting protocols for the workplace, including regularly cleaning high-touch surfaces;
  3. Enhancing the ability of employees, customers, and clients to wash hands or take other personal hygiene measures, such as using hand sanitizer; and
  4. Complying with CDC social distancing requirements, including maintaining six-foot social distancing for both employees and members of the general public when possible or employing other separation measures, such as face coverings or barriers.

This plan must be provided to employees as well as be posted publicly. For additional details, see Executive Order 20-26.

MASSACHUSETTS

CORI Verification by Teleconference Temporarily Allowed

Effective April 29, 2020 through the termination of the current state of emergency, regulations issued by the Massachusetts Department of Criminal Justice Information Services allow employers to verify an individual’s identity by teleconference for the Criminal Offender Record Information (“CORI”) authorization process.

If an employer is unable to verify an individual’s identity in person or through a notarized CORI authorization form due to the 2020 COVID-19 Pandemic, the employer may review the individual’s identification and verify identity by teleconference.

Upon termination of the current state of emergency, all CORI requests verified in this manner must be verified either in person or through submission of a notarized CORI acknowledgment form within seven business days.

MINNESOTA

Minneapolis Minimum Wage Rate Increase Takes Effect July 1

Effective July 1, 2020, the minimum wage rate for Minneapolis will increase again as part of a phased plan to raise the minimum wage rate for all employees to $15.00 by 2024. The new minimum wage rate will be $13.25 for large employers with over 100 employees and $11.75 for small businesses with up to 100 employees. The rate applies to all workers, regardless of tips.

NEW JERSEY

Family Leave Insurance Benefits Expanded

Effective July 1, 2020, New Jersey Family Leave Insurance (“NJFLI”) is expanded to now provide New Jersey employees up to twelve weeks of benefits, paid at a rate of 85% of their pay to a weekly maximum of $860, during time off from work to bond with a newborn or newly adopted child or to provide care for a seriously ill or injured family member. This increase also applies to temporary disability benefits. Intermittent leave allotment also increases from 42 days to 56 days.

State WARN Act Amended with Carve-Outs

Effective July 19, 2020, SB 2353 amends the state’s WARN Act to require increased notice time and severance pay for certain plant closures, transfers and mass layoffs.

The new law requires employers with 100 or more employees to provide at least 90 days’ notice of any move or closure that will result in a layoff of 50 or more employees over a period of 30 days or less. Part-time employees are to be counted toward the 100-employee threshold. 

Impacted employees must receive one week of severance pay for each full year of employment. Employers who fail to provide the required notice must provide impacted employees with an additional four weeks of pay.

SB 2353 clarifies that a “mass layoff” triggering the NJ WARN Act does not include a mass layoff due to a fire, flood, natural disaster, national emergency, act of war, civil disorder or industrial sabotage, decertification from participation in the Medicare and Medicaid programs, or license revocation. This exclusion includes the COVID-19 pandemic.

The new law also postpones the effective date of the increase of the notice period from 60 days to 90 days and the mandatory severance payments until 90 days following the termination of Executive Order 103 declaring a public health emergency in the state of New Jersey. Currently, Executive Order 103 has already been extended through May 7 and may be extended again by order of the Governor.

OREGON

Oregon Regional Minimum Wage Rates to Increase Again on July 1

Effective July 1, 2020, the minimum wage rates for employers in Oregon will increase according to their location within designated areas.

The Urban Minimum Wage rate of $13.25 per hour will apply to the Portland Metro area, which includes parts of Multnomah, Clackamas, and Washington Counties. Employers in these counties who need to see if they must pay the Urban Minimum Wage can enter their address here.

The Non-urban Minimum Wage rate of $11.50 applies to employers in the following counties:

  • Baker
  • Coos
  • Crook
  • Curry
  • Douglas
  • Gilliam
  • Grant
  • Harney
  • Jefferson
  • Klamath
  • Lake
  • Malheur
  • Morrow
  • Sherman
  • Umatilla
  • Union
  • Wallowa
  • Wheeler

The Standard Minimum Wage rate of $12.00 applies to employers in the remaining areas — including Eugene, Salem, Bend, Medford, Springfield, Corvallis, and Albany — in the following counties:

  • Benton
  • Clatsop
  • Deschutes
  • Columbia
  • Hoover River
  • Jackson
  • Josephine
  • Lane
  • Linn
  • Lincoln
  • Marion
  • Polk
  • Tillamook
  • Wasco
  • Yamhill

Oregon also does not allow for tip credit to tipped employees. Those employees must earn the regular minimum wage.

An updated minimum wage poster is expected to be released by the Oregon Wage and Hour Division, but is not yet available.

PENNSYLVANIA

Philadelphia Minimum Wage Increases Again for City Employees and Contractors 

Effective July 1, 2020, the minimum wage for all city employees, contractors and subcontractors will increase from the current $13.25 to $13.75 under the next phase of the Philadelphia Minimum Wage Bill. The minimum wage will continue to increase each year until it reaches $15.00 in 2022. After that, the minimum wage standard will continue to increase based on annual consumer price index adjustments.

The increased minimum wage will apply to all city employees and to employees of covered employers, including those that are recipients of city concessions, franchises and leases, as well as recipients of city financial aid. Financial aid recipients include all persons or entities that receive direct city assistance of more than $100,000 in any 12-month period. Student interns, workers engaged in a transitional training program and employees on a construction project subject to prevailing wage requirements are not covered.

PUERTO RICO

Notice Required to be Provided to Laid-Off Workers

Issued April 16, 2020, Circular Letter 2020-02 requires employers in Puerto Rico to provide a notice to employees in the event of a lay-off or reduction in hours. The notice can be provided via mail, email or text message and must also be sent to previously-impacted employees.

The model notice, provided only in Spanish, can be found in Section 4 of the document here: Circular Letter 2020-02.

SOUTH CAROLINA

South Carolina Requirements for Back to Work Offers

South Carolina’s Department of Employment and Workforce (“DEW”) recently issued guidance that recommends how an employer should manage a former employee who turns down an offer of suitable work. DEW states that, if an employer offers an individual a job and they refuse, the employer should report the incident to DEW through the Employer Self Service Portal or submit an Offer of Work Form to South Carolina Department of Employment and Workforce by mail. The fillable form can be downloaded here: Offer of Work form.

An offer of employment may be extended in written or oral form and must include the nature of work offered, the wages and the hours per week, the shift or daily hours of the proposed employment, the expected duration of the employment, the time and place the claimant should report for duty, and the name of the person to whom he is to report.

To report a written offer that is declined, the employer must submit a copy of the offer to DEW and certification that it was received and refused by the individual or that it was sent via registered or certified mail to the last known address of the individual and that no response was made by the claimant. To report an offer extended orally that is declined, the employer must submit a sworn statement to DEW, under penalty of perjury, the terms of employment listed above and any reason given by the claimant for his refusal to accept the work.

If an employee declines an offer of work, the individual will likely be disqualified from receiving unemployment benefits.

UTAH

Utah Small Businesses May Apply Commercial Rental Assistance

The State of Utah has created a $40 million COVID-19 Commercial Rental Assistance Program to help small businesses in Utah that have lost revenue as a result of measures taken during the pandemic.

The program was created to assist with commercial rent payments for small businesses, including non-profits, sole proprietors, independent contractors, and self-employed. To be eligible, a business must: 

  • Have a current lease on commercial property in Utah;
  • Claim Utah as its principal place of business;
  • Have fewer than 100 employees as of February 15, 2020;
  • Demonstrate at least a 50 percent loss of gross monthly revenue after March 1, 2020, as a result of federal, state, or local public health measures; and
  • Have not received funds from the COVID-19 Agricultural Operations Grant Program. 

Under the program, businesses may receive up to up to $10,000, the amount of which is determined by their rent amount and their demonstrated percentage of losses. Businesses who sustained a monthly gross revenue loss between 50 and 70% are eligible to receive up to 50% of monthly rent. Businesses who sustained a monthly gross revenue loss over 70% are eligible to receive up to 100% of monthly rent. 

Businesses that received a Paycheck Protection Program (PPP) loan are eligible for approximately one-half of the rental assistance amounts stated above. 

The application period for the program is from May 11, 2020 until the $40 million is exhausted. The applications should be submitted at www.coronavirus.utah.gov.  

For additional details and to access the application, go to COVID-19 Commercial Rental Assistance Program

 Utah “Shield Law” Provides Financial Immunity Related to COVID-19

Effective May 5, 2020, SB 3007 addresses individual or employer financial immunity related to COVID-19. Under the new law, an individual or employer is immune from civil liability, which may result from exposing another individual to COVID-19, whether that person is an employee, customer, visitor, or guest of the person or establishment. Immunity is forfeited if the individual or employer engages in “willful misconduct,” “reckless infliction of harm,” or “intentional infliction of harm.”

Rights available to persons under Utah Worker’s Compensation, Utah OSHA, and Utah Occupational Disease Act are not affected by this change.

Protections for Emergency Responders

Retroactively effective March 21, 2020, through June 1, 2021, HB 3007 amends the Utah Worker’s Compensation Act with respect to First Responders who may contract COVID-19 due to employment exposure.

A first responder who contracts COVID-19 and who receives a confirming diagnosis from a medical provider is presumed to have contracted it by accident during the course of their employment duties and is automatically eligible for Workers’ Compensation. A Workers’ Compensation claim must be made within 14 days of the alleged exposure.

Failure to provide medical documentation of COVID-19 disqualifies the first responder from qualifying for benefits under this law. If a death results from COVID-19 exposure at work, benefits are payable to survivors.

VERMONT

Mandatory Health & Safety Training Required

Under Executive Order 01-20 and subsequent addendums, Vermont employers are required to have their employees complete a mandatory health and safety training.  State agencies have developed training, but businesses with more than ten employees are required to develop a training plan that supplements the agencies’ training standards with additional policies and procedures customized to the entity and employment environment.

Healthcare workers, first responders, and other workers trained in infection control, personal protection and universal precautions are exempted from the training requirements.

All businesses and non-profit and government entities currently in operation were required to complete and document mandatory health and safety training by May 4, 2020.

The entire text of the order can be found here: Executive Order 01-20.

VIRGINIA

Virginia Values Act Goes into Effect July 1

Effective July 1, 2020, the Virginia Values Act protects the rights of lesbian, gay, bisexual and transgender Virginians in employment, housing and accommodations and expands the ability of plaintiffs to sue in Virginia state court.

The act also amends the Virginia Human Rights Act to prohibit discrimination in employment on the basis of sexual orientation and gender identity and removes the 12-month back-pay damages cap. Instead, it states that courts may award prevailing employees “compensatory and punitive damages” and uncapped “reasonable attorney fees and costs,” among other non-monetary relief available to employees.

For termination claims based on any characteristic other than age, the act will apply to employers with more than five employees. Other provisions of the act will apply employers in Virginia with 15 or more employees.

New Wage Theft Law Enacted

Effective July 1, 2020, Virginia’s new wage theft law (HB 123/SB 838) allows employees to sue their employers for allegedly unpaid wages. Previously, a Virginia employee had to file an administrative claim with the Virginia Department of Labor and Industry.

The new law permits recovery of wages owed plus 8% interest from the date the wages were due, as well as recovery of triple damages and a $1,000 civil penalty per violation. If an employer is found to have committed a “knowing violation,” the court can also award attorneys’ fees and can enforce criminal penalties. The definition of “knowing” includes actual knowledge, deliberate ignorance, or acts in reckless disregard of the truth. Establishing that an employer acting knowingly does not require proof of a specific intent to defraud the employee.

The new law contains an anti-retaliation provision, mandating that an employer may not discharge or discriminate against an employee for filing a wage theft complaint or testifying in any such proceeding.

Ban on Restrictive Covenants for Low-Wage Employees

Effective July 1, 2020, Virginia’s new restrictive covenant law (HB 330/SB 480) prohibits employers from entering into, enforcing, or threatening to enforce a restrictive covenant against low-wage employees whose average weekly earnings are less than the average weekly wage of the Commonwealth — currently just under $20 per hour.

Under the law, a restrictive covenant is defined as an agreement that restrains, prohibits, or otherwise restricts an individual’s ability to compete with his former employer. The law does not restrict nondisclosure, confidentiality or non-solicitation agreements.

The law’s definition of low-wage employees includes interns, students, apprentices, and trainees. It also applies to independent contractors whose hourly rate is less than the median hourly wage for the Commonwealth for all occupations. Employees whose earnings include sales commissions, incentives, or bonuses are excluded.

Employers are required to post an approved notice summarizing the law, but the Department of Labor and Industry has not yet published such a notice as of yet.

Reduction of Marijuana Possession Penalties

Also, effective July 1, 2020 SB 2 / HB 972 reduces penalties for simple marijuana possession (up to one ounce) offenses to a civil violation and seals the records related to prior convictions under the marijuana law. Employers and educational institutions are prohibited from requiring an applicant to disclose information concerning any marijuana arrests, criminal charges, or convictions.

Hours on Wage Statements Required for Non-Exempt Employees

Effective July 1, 2020, HB 689 requires Virginia employers to include the number of hours worked during the pay period on employees’ wage statements if the employee is paid based on the number of hours worked or is paid a salary that is less than the standard salary level under the federal Fair Labor Standards Act (FLSA) .

HB 689 provides clarification to employers of the previously-enacted SB 1696 that did not distinguish between exempt and non-exempt employees.

Misclassified Workers Given Protections and Right to Seek Damages

Effective July 1, 2020, HB 984 allows any individual not properly classified as an employee to bring a civil action for damages against their employer for failing to properly classify them as an employee if the employer had knowledge of the individual’s misclassification.

Also effective July 1, 2020, HB 1199 prohibits employers from retaliating against any employee or independent contractor for reporting or planning to report an employment misclassification or failure to pay required benefits or other contributions. Employers may not discharge, discipline, threaten, discriminate against, penalize, or take other retaliatory action that would impact an employee or independent contractor’s compensation, terms, conditions, location, or privileges of employment.

 New Whistleblower Law Enacted

Effective July 1, 2020, HB 798 provides whistleblower protection to workers and provides the right to bring a lawsuit seeking injunctive relief, reinstatement, and uncapped compensation for lost wages, benefits, and other remuneration for retaliation taken against them.

The new law prohibits an employer from discharging, disciplining, threatening, discriminating against, or penalizing an employee, or taking other retaliatory action affecting an employee’s compensation, terms, conditions, location, or privileges of employment because of the employee’s protected conduct.

Protected conduct under the Whistleblower Law includes:

  1. Reporting in good faith a violation of any federal or state law or regulation to a supervisor or to any governmental body or law enforcement official;
  2. Being requested by a governmental body or law enforcement official to participate in an investigation, hearing, or inquiry;
  3. Refusing to engage in a criminal act that would subject the employee to criminal liability;
  4. Refusing an employer’s order to perform an action that violates any federal or state law or regulation when the employee informs the employer that the order is being refused for that reason; or
  5. Providing information to or testifying before any governmental body or law enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation.

The Whistleblower Law does not:

  1. Authorize an employee to make a disclosure of data otherwise protected by law or any legal privilege;
  2. Permit an employee to make statements or disclosures knowing that they are false or that they are in reckless disregard of the truth; or
  3. Permit disclosures that would violate federal or state law or diminish or impair the rights of any person to the continued protection of confidentiality of communications provided by common law.

WASHINGTON

Expanded Employment Protections for High-Risk Employees

Washington’s Order 20-05, which proclaimed a state of emergency associated with the spread of COVID-19, was recently amended to provide protections for high-risk employees, defined by the CDC as people over 65 and people of any age who have certain chronic underlying health conditions. The order will remain in effect until June 12 unless otherwise extended.

Upon request from a high-risk employee, Washington employers are required to explore any and all options for alternative work arrangements to protect high-risk employees. Examples of alternative work arrangements include such options as telework, alternative or remote work locations, reassignment, and social distancing measures.

If an alternative work arrangement is not feasible, the employer must allow an employee to utilize all available accrued leave options with no risk of adverse employment action. Employers are required to allow employees to use employer-granted accrued leave or Washington unemployment insurance in any sequence at the employee’s discretion. Employers must also maintain health insurance benefits until the employee is able to return to work.

Employers can require high-risk employees to give up to five days of advanced notice of their decision to report back to work from leave.

Hairstyle Discrimination Banned

Effective June 10, 2020, HB 2602 amends the Washington Law against Discrimination to prohibit discrimination in employment and public accommodation based on characteristics “historically associated or perceived to be associated with race.” The amendment defines race as being “inclusive of traits historically associated or perceived to be associated with race including but not limited to hair texture and protective hairstyles.” Protective hairstyles include but are not limited to afros, braids, locks, and twists.

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